Smt. Sangeeta Kharia, Gwalior v. CIT, Gwalior

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.602/AGR/2008 ASST. YEAR: 2003-04 SMT. SANGEETA KHARIA VS. C.I.T. GWALIOR. C/O. SHRAI N D GUPTA ADVOCATE SIDDH BABA CHOWK NEAR KAILASH TALKIES LASHKAR GWALIOR. (PAN : APXPK 3416 K/F) (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SMT. ARCHANA RANJAN CIT-D.R. ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT DATED 28.03.2008 PASSED UNDER SECTION 263 OF THE INCOME-TAX ACT 196 1 (THE ACT HEREINAFTER) CANCELLING THE ORDER PASSED BY THE A.O. UNDER SECTION 143(3) READ WITH SECTION 147 IN WHICH THE A.O. HAS ACCEPTED THE GIFT RECEIVED BY THE ASSESSEE AMOUNTIN G TO RS.40 000/- FROM SMT. VEERWATI ASHTHANA W/O. LATE SHRI J.G. ASHTHANA R/O. SAGAR THROUGH ACCOUNT PAYEE DRAFT NO.438088 DATED 17.12.2002 DRAWN ON STATE BANK OF INDIA INDO RE. SINCE THE APPEAL FILED WAS LATE WE THEREFORE AFTER APPRECIATING THE FACTS OF THE CASE CONDONE THE DELAY. 2 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE TH EREFORE DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. CIT D.R. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS SHOWN GIFT RECEIVED AMOUNTING TO RS.40 000/- IN THE CAPITAL ACCOUNT FILED ALONGWITH THE RETURN. SUBSEQUENTLY THE PROCEEDINGS UNDER SECTION 147 WERE INITIATED AND THE ASSESSEE H AS SUBMITTED ALL THE NECESSARY DOCUMENTS TO PROVE THE GENUINENESS OF THE GIFT. THE A.O. AFTER EXAMINING THE DOCUMENTS FURNISHED BY THE ASSESSEE ACCEPTED THE GIFT AND DID NOT MAKE ANY AD DITION. SUBSEQUENTLY THE CIT ISSUED NOTICE UNDER SECTION 263 ON 19.03.2008 AND ULTIMATELY PASS ED AN ORDER UNDER SECTION 263 OF THE ACT HOLDING THAT THE A.O. HAS NOT EXAMINED CREDITWORTHI NESS OF THE DONOR AND THE GENUINENESS OF THE TRANSACTION AND ACCORDINGLY CANCELLED THE ASSES SMENT ORDER HOLDING IT TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. WE HAVE HEARD THE LD. CIT - D.R. AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION JURISDICTION UNDER SECTION 263 CAN BE EXERCISED BY THE CIT IF BOTH THE CONDITIONS THAT THE ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE SATISFIED. IN THIS CASE WE NOTED FROM THE ASSESSMENT ORDER THAT THE A.O. HAS O BSERVED AS UNDER :- IN RESPONSE TO THE NOTICE ISSUED U/S 143(2) SHRI N .D. GUPTA ADVOCATE ATTENDED THE PROCEEDINGS TIME TO TIME. PRODUCED DETAILS REG ARDING IDENTITY CREDITWORTHINESS AND GENUINENESS OF GIFTS. THE CAS E WAS EXAMINED IN THE LIGHT OF THE DOCUMENTS FURNISHED. 3 5. THE OBSERVATIONS OF THE A.O. CLEARLY DENOTES THA T THE A.O. HAS DULY EXAMINED THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE G IFT AND ACCEPTED THE SAME. THIS IS THE SETTLED LAW THAT THE A.O. HAS TAKEN ONE OF THE VIEW WHICH I S NOT UNSUSTAINABLE IN LAW. THE CIT CANNOT THRUST UPON HIS OPINION ON THE A.O. WHILE INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT 243 ITR 83 (SC). 6. LD. CIT - D.R. ALTHOUGH HAS VEHEMENTLY CONTENDED BEFORE US SUPPORTING THE ORDER OF CIT PASSED UNDER SECTION 263 BUT COULD NOT PROVE TH AT IT IS A CASE WHERE NO ENQUIRY WAS CARRIED BY THE A.O. OR THE VIEW TAKEN BY THE A.O. WAS UNSUS TAINABLE IN LAW. IN VIEW OF THE SETTLED POSITION OF LAW WE QUASH THE ORDER PASSED UNDER SE CTION 263 OF THE ACT. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT ON 15.04.2010) . SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 15 TH APRIL 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY